By Kalpana Rashiwala
PRICES of completed apartments above 506 sq ft in the Non-Central Region or suburban areas have been the most resilient year to date (up to May) followed by small units islandwide. Big apartments in the Central Region have fared the worst, show data from NUS.
Based on NUS's Singapore Residential Price Index (SRPI) series, which tracks prices of completed apartments and condos, the sub-index for the Non-Central Region (excluding small units) rose 1.9 per cent between December last year and May this year.
Over the same period, the sub-index for small units (up to 506 sq ft) islandwide dipped 0.1 per cent, while the sub-index for the Central Region (excluding small units) slipped an even bigger 2 per cent. Central Region is defined as Districts 1-4 (which include the financial district and Sentosa Cove) and the traditional prime residential districts of 9, 10 and 11.
The pattern is similar to trends in the past two years. In 2011, the Non-Central Region sub-index (excluding small units) rose 11.3 per cent, higher than a 10.6 per cent increase for small units islandwide and 5.1 per cent hike for Central Region (excluding small units) In 2010, the three indices posted gains of 14.9 per cent, 13.8 per cent and 7.7 per cent respectively.
"The index movements pretty much reflect what we've been seeing in the market in the past few years," says DTZ's SE Asia chief operating officer Ong Choon Fah.
"In suburban locations, because developers have been launching new projects at prices higher than those of existing, completed projects in the vicinity, it has an effect on prices of the completed properties as well."
Even so, analysts note that there is usually still a price gap between new launch and resale prices, which means that buyers, especially owner occupiers, still see value in completed suburban condos, says SLP International managing director Peter Ow.
Mrs Ong notes that in addition to owner occupiers, there is demand for completed suburban apartments from investors. "Rents have held up well. Many younger expats on smaller housing budgets are opting to lease suburban condos and even HDB flats," she adds.
In contrast, big units in the Central Region tend to be more pricey and cater mostly to high net worth Singaporean investors and foreigners. "Some of them could be affected by various cooling measures as well as the global economic situation. They may also be attracted to other property markets such as London," says Mrs Ong.
Meanwhile, shoebox apartments continue to be popular, with their more affordable lump sum investment size.
NUS's May 2012 flash estimates released yesterday show that the overall SRPI increased 1.5 per cent in May over the preceding month. This is double the 0.7 per cent month-on-month hike in April. The sub-index for small apartments islandwide posted a 0.9 per cent month-on-month rise in May, against a drop of 0.8 per cent in April.
The sub-indices for the Central Region and Non-Central Region, both excluding small units, were up 0.8 per cent and 2.2 per cent respectively month on month for May.
In April, the Central Region sub-index rose 1.5 per cent while that for the Non-Central Region was unchanged from the preceding month.
The SRPI series, minted by NUS's Institute of Real Estate Studies, tracks prices of completed private apartments and condos (excluding executive condos).
R'ST Research's caveats analysis shows a pick-up in resale volumes of private apartments/condos above 506 sq ft in recent months, in both the Central and Non-Central regions - compared with January, when volumes dived following the introduction of the additional buyer's stamp duty in December.
The figures hovered around 700 units or more per month in the Non-Central Region between March and May, compared with 192 in January and 345 units in February. However, the 683 caveats in May are down 12.2 per cent from April's 778. In the Central Region, 259 caveats were lodged in May, nearly 5 per cent higher than April's 247 units. The 200-plus caveats lodged per month between March and May are up from the January and February numbers of 50 and 119 respectively.
This article was first published in The Business Times.